Pros & Cons of Shareholder owing business property

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The owner of a business is currently holding a property personally and renting it to the business. However, the business owner is a higher rate tax payer and therefore paying 40% (at least) tax on the rental profits (there are very few costs).

However, obviously he is only gaining a 19% CT deduction in the company tax comp.

Is there any obvious reason I’m missing why he shouldn’t just reduce the rent to keep him within the basic rate, and hence gain the tax difference.

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Are you forgetting the 32.5% he would pay if he took the same money out as dividend? That needs to go in your calculations somewhere. By comparing the tax if he takes money out of the company, with the tax if he leaves it in, you are not comparing like with like.